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Using MS Excel spreadsheet, create an assessment for each of the following problems: 1.Calculate the monthly mortgage payment of principal and interest for a loan with an initial balance of $250,000, an annual stated interest rate of 5%, and 30 years to maturity. Use Excel to develop this response and present your result within a separate page of the spreadsheet. Would only someone who makes a high income be able to afford this mortgage payment? Or would someone who makes the minimum wage be able to afford this mortgage payment? 2.Develop the amortization table for the loan outlined in problem 1. Use an Excel spreadsheet to develop and present this table. Present this result in a separate page of the spreadsheet.…

You’ve been offered a full time position as an assistant financial analyst at Bathurst Metal Works. Your latest assignment involves the analysis of several risky projects. Because this is your first assignment dealing with risk analysis, you have been asked not only to provide a recommendation on the project in question but also respond to a number of questions aimed at judging your understanding of risk analysis and capital budgeting. The memorandum you received outlining your assignment follows: To: Assistant Financial Analyst From: Chief Financial Officer Re: Capital budgeting and risk analysis You are required to conduct a risk analysis of the following new project, as outlined below. This new project involves purchase of a new laser cutting tool that can…

FIN 320: Managerial Finance Capital Budgeting Consider the following two mutually exclusive projects Year CF of Project A CF of Project B 0 -$350,000 -$50,000 1 45,000 24,000 2 65,000 22,000 3 65,000 19,500 4 440,000 14,600 Whichever project you choose, if any, you require a 15 percent return on your investment. If you apply the payback criterion, which investment will you choose? Why? I would pick project B because the payback period is less. If you apply the NPV criterion, which investment will you choose? Why? If you apply the IRR criterion, which investment will you choose? Why? If you apply the profitability index criterion, which investment will you choose? Why? Based on your answers in (a) through (e ),…

Job order costing 40 marks Your friend has his own business (Sisulu Ltd). He is currently using job order costing and is applying a plant-wide overhead rate. At the beginning of March, Sisulu Ltd had two jobs in process: Job 24 and Job 25, with the following accumulated cost information: Job 24 $ Job 25 $ Direct materials 5 100 1 500 Direct labour 1 200 3 000 Applied overhead 780 1 950 Balance, 1 March 7 080 6 450 During March, two more jobs (26 and 27) were started. The following direct materials and direct labour costs were added to the four jobs during the month of March: Job 24 $ Job 25 $ Job…

Question 1 On December 31, 2014, Paladium International purchased 70% of the outstanding common stock of Sennex Chemical. Paladium paid $140,000 for the shares and determined that the fair value of all recorded Sennex assets and liabilities approximated their book values, with the exception of a customer list that was not recorded and had a fair value of $10,000 and an expected remaining useful life of 5 years. At the time of purchase, Sennex had stockholders’ equity consisting of capital stock amounting to $20,000 and retained earnings amounting to $80,000. Any remaining excess fair value was attributed to goodwill. The separate financial statements at December 31, 2015 appear in the first two columns of the consolidation workpapers shown below. Complete…

Answer all the questions, each question carries 20 marks. Question: 1 What is accounting? Discuss its Advantages and Disadvantages in a detailed manner? Accounting is the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events, which are, in part at least, of a financial character and interpreting the result thereof. According to the American Accounting Association [AAA]; Question:2 Yankee Hotel Foxtrot initiated operations on July 1, 2014. To manage the company officers and managers have requested monthly financial statements starting July 31, 2014. The adjusted trial balance amounts at July 31 are shown below. Debits Credits Cash $ 7,680 Accumulated Depreciation- Equipment $ 840 Accounts…

Saturn Olive Oil Co is a subsidiary of Mercury Australasia based in Cobram Victoria and produces a range of olive oil products. Olives are purchased from sub-contract olive plantation farmers in an around Cobram. The olives are cold pressed and the oil processed and filtered before bottling and sold to a variety of wholesale and retail vendors under several different brand names. The following data relates to the production of Saturn Olive Oil during the month of February 2017. At the start of February there was 75,000 litres of product in process. All materials are added at the start of the process and conversion costs are incurred evenly throughout whole of the process. Work-in-Process: February 1, 2017 75,000 Litres Stage…

1 (Max. Marks: 25) Kalman, trading as Kalman Stores, submits to you draft accounts for the year ending 31 December 2016 and a balance sheet at that date. He explains that towards the end of the financial year his accountant resigned and he had ‘finished off the books himself. He thinks that errors have occurred and asks for your help. An examination of the books reveals the following: Rent due by T. Smith for Dec 2016, amounting to $560 is not included in the accounts. A payment of $2,300 for a new computer has been debited to the sundry expense Payment was made 31 December 2016. Commission due to sales staff for the month of December, $1200, has been overlooked. Repairs…

Question 1: Differences between management accounting and financial accounting (15 Marks) You are the financial controller of a large manufacturing organization and intend to approach the human resources (HR) manager seeking to create two new positions: a financial accountant and a management accountant. Required: 1 Prepare a briefing document for the HR manager which explains the differences between these two roles. 2 Formulate (and answer) the five likely questions that you anticipate the HR manager will ask you about these two positions when you meet. Question 2: Product cost classification: manufacturer (15 Marks) The following cost data for the current year relate to Heartstrings Pty Ltd, a greetings card manufacturer: Service department costsl $ 50 000 Direct labour: wages 242…

AGENDA: PROFIT PLANNING (BUDGETING) Building a master budget. Sales budget Production budget Direct materials budget Direct labor budget Manufacturing overhead budget Ending finished goods inventory budget Selling and administrative expenses budget Cash budget Budgeted income statement Budgeted balance sheet OVERVIEW OF BUDGETING A budget is a detailed plan for acquiring and using financial and other resources over a specified period. Budgeting involves two stages: Planning: Developing objectives and preparing various detailed budgets to achieve those objectives. Control: The steps taken by management to attain the objectives set down at the planning stage. PURPOSES OF BUDGETING Budgets communicate management’s plans throughout the organization. Budgeting forces managers to give planning top priority. Budgets provide a means of allocating resources to their most effective…

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